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The pandemic has struck just as downwards rent reviews fall due

The renewed shutdown of most business premises underlines one of the biggest challenges ever faced in commercial property; what is the rental value of a property that you can’t use?

That conundrum is fuelling a baptism of fire for the first test of the upwards and downwards rent review provisions. Disputed rent reviews are usually referred to an independent chartered surveyor who acts as an arbitrator or expert and decides the new rent.

Chartered surveyor and rent review expert Conor Ó’Cléirigh said that the conundrum is amplified by a strong wave of lettings at relatively high rents coming through from 2015.

His analysis of the Commercial Leases Register shows that there were 30% more new lettings agreed in 2015 than the previous year, reflecting the growing economy. 

“It takes about nine months from the date of a disputed rent review until the arbitrator’s decision is known,” he added. As a result of this, we will not see the fallout from this pandemic in the commercial property market until early next year.

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